Best Results Organizing

Clutter, lack of systems, and general daily life can all conspire to work an unfortunate kind of magic in a less than entertaining day: things disappear. As part of an ongoing, periodic series, Lost and Found, we review the important papers in your life, and discuss how to replace them if they seem to have gone into witness protection.

Have you ever heard of OASDI? That’s the Old Age, Survivors and Disability Insurance Program, or what we generally call Social Security. If you work in the United States and have an employer, 6.2% of your paycheck (up to $6621, on up to $106,800 of earnings, annually) goes to the OASDI program. Your employers pay an equivalent portion. If self-employed, you pay the employee and employer portions–that’s 12.4%. (And, not to get too far into the minutia, but an additional 1.45% is withheld from payroll for employees, and employers pay a matching amount, such that 2.9% funds Medicare.)

What Is the Social Security Statement?

Three months before your birthday each year, the Social Security Administration mails you a statement of your prior calendar year’s earnings and estimates. It’s a bi-fold piece of white paper, with black text and green accent ink, and says “Your Social Security Statement” at the top. (View Wanda Worker’s sample statement.)

What Information Does the Social Security Statement Provide?

Your annual statement is designed to give you a snapshot of:

–your earnings, on which you (and/or your employers) have paid Social Security taxes over the years

–the estimated benefits you (and your family) may receive as a result of your earnings

Page 2 of your statement outlines the benefits you should receive in various categories:

Retirement–You must have 40 credits, of which you can earn up to four per year, to qualify for retirement benefits. For 2009, for example, $1090 in wages or self-employment earnings equaled one credit. If you haven’t yet earned 40 credits, your statement will tell you how many you have earned; after 40, it merely acknowledges you’ve qualified for benefits.

The retirement section explains, based on current laws and dollar values, the monthly benefits you would receive if you retired at your full retirement age (which varies according to birth year), as well as at ages 62 (the earliest age at which you can apply for retirement benefits) and 70. (A delayed retirement age usually means increased average earnings, and therefore increased benefits; there’s also a special late retirement benefit.

To get an immediate and personalized benefit statement, you can use the online Retirement Estimator.

Disability–tells how much money you would receive per month if you became disabled now.

Family/Survivors–explains the varying benefits your survivors might get per month, in varying situations, if you were to become disabled or die.

Medicare–tells you whether you have earned enough credits to qualify for Medicare and reminds you to enroll in Medicare three months prior to your 65th birthday, no matter when you actually retire.

Page 3 lists every year in which you’ve had reported earnings for both Social Security and Medicare, dating from your first year of employment. Any years in which you did not have earnings will show as zero.

In addition to data specific to your personal earnings and estimated benefits, the statement is chock-full of helpful, easy-to-understand information about your Social Security account, statement and options. I urge you to read your statement when it arrives.

Why Do I Have To Look At The Statement?

Your retirement and disability benefits are dependent upon the accuracy of your record. If your tax returns or old 1099s say one thing and your statement says another, be concerned.

If the earnings numbers are higher than your tax records indicate they should be, you may be a victim of identity theft wherein someone is using your Social Security number for employment (and possible other purposes, like insurance fraud). Don’t just think:

“Hey! Nifty! I’m getting bonus benefits because I’m getting credit for the earnings of the bad guy who stole my identity.”

If the bad guy hasn’t been paying taxes on his earnings, it could mean some audits in your future.

If the earnings numbers are lower than your records indicate they should be, it probably means you have not been credited for work you did and payments you made into the OASDI program.

Not worried enough to do anything about these errors because you’re so far from retirement? Then worry about your family, because if you become disabled or shuffle off this mortal coil, you’re leaving your family with a lot of extra paperwork and the possibility that errors will go unchallenged and you or they will not receive deserved benefits.

Why Don’t I Have My Social Security Statement?

If you aren’t currently employed because you’re raising children, caring for a relative, taking a sabbatical, in school or are otherwise not involved in the workforce (for reasons other than retirement), it might be easy to fail to notice that your Social Security Statement hasn’t arrived. Or, if it does come, you quickly file it away, assuming there were no changes since the previous statement, because you hadn’t been working, and you’d fail to note earnings credited to you for work you hadn’t done.

Are you missing your most recent Social Security Statement? Assuming you don’t have mailbox elves, your statement may be missing for a number of reasons:

• You’re not yet 25 years of age. The Social Security Administration doesn’t begin sending statements to workers prior to age 25.
• You’ve started receiving benefits based on your record.
• You’re 62 or older and have started receiving benefits based on your (current or former) spouse’s record.
• You’ve changed addresses since the last time you paid federal taxes and neither you nor your employer notified the Social Security Administration or the IRS.
• You may be a victim of identity theft.
• Your statement may be lost somewhere in the mail.

How Do I Replace a Lost or Missing Statement?

If your Social Security Statement has not arrived by the month prior to your birthday, contact the Social Security Administration at 800-772-1213 or fill out the form to request your statement. Be prepared to provide your:

• Name as shown on your Social Security card. (If you’ve remarried, divorced, or otherwise changed your name since issuance of the card, deal with that after you’ve procured your statement and verified accuracy.)
• Social Security number
• Date of birth
• Place of birth
• Mother’s maiden name

In all likelihood, you will be given the option of waiting in a phone queue or having a representative call you back. Unless you have lots of free time or a speakerphone, opt for the call back, which will likely come within 30 minutes. When they do call back, make sure they have your correct mailing address; addressing errors could lead to your statement being mis-delivered, increasing the chance of identity theft.  

What Do I Do If The Information On My Statement Is Wrong?

There are a variety of reasons the information on your statement may be wrong. When I’ve worked with my organizing clients to get records corrected, we’ve seen errors based on:

–Wrong Social Security number (e.g., inverted numbers, 4s that looked like 9s on W-4s)
–Wrong Employer Identification number
–Misspelled names, or nicknames used instead of legal names
–Two Social Security numbers–This usually happens when parents apply for a card on a child’s behalf, but due to a lost card, the now-adult reapplies but provides slightly different information.
–Identity theft

Call 800-772-1213 (and be prepared for the wait or the call back). In order to better help you correct bad information, the representative will need to ask you a variety of financial questions. At a bare minimum, be ready to provide last year’s earnings data for verification. You’ll find this on your copy of your tax returns.

You can correct information dating back to any time in your earnings history; however, be prepared to find that the further back you go, the more complex the investigation will be, and the more essential your records will be to solving any mysteries. (This is why Paper Doll pesters…I mean encourages…you to maintain your financial files so carefully.)

A Success Story

A client and I recently unearthed a handful of crumpled 1099s for three consecutive years in the 1980’s, an old Social Security statement and an aged Post-It reminder, from the client to herself, to correct some errors. When my client was working at her first job, she transposed some digits when providing her Social Security number on her W-4…and her employer never asked to see her actual card for verification. Thus, none of her earnings for the years at those jobs were ever credited to her.

The idea of trying to get the situation fixed had been overwhelming. My client assumed she had to write a letter to the Social Security Administration, and while she procrastinated on the dreaded task, the associated documents became part of a mlange of papers (elementary school registrations, recipes, expired oil change coupons) from that era that sat, collecting dust.

I encouraged her to call the Social Security Administration while we continued sorting and filing. She had to speak very slowly and distinctly (and repeat information) to the computer, and eventually she opted to be placed in a queue for a callback. Twenty minutes later, a helpful representative listened as we explained the situation. Because we had the original 1099s in hand, we were able to read her the taxpayer identification number of the employer and report the earnings as listed on them. In due course, each year’s earnings (for the right name but wrong Social Security number) were identified in the system and re-applied to the correct account.

A long-procrastinated project was completed, and my client is now credited for the hard work she did so long ago. Was it fun and entertaining? No. But neither did she have to leave her home, spend any money, fill out complicated forms or stand in any lines to correct an error made when she was too young to know how important those darn Social Security numbers really are.

Do I Have To Keep All My Social Security Statements?

Some professional organizers would probably tell you no, that keeping the most recent statement should suffice. And certainly, if you’re in your 20s, the prospect of eventually keeping every statement might seem daunting. However, maintaining statements from age 25 to 65 only means 40 pieces of paper. And given the advancements of the digital age, I’m sure paper statements will eventually be replaced by secure online accounts. But for now, I’m advising my clients and readers to hold on to their statements. It’s the easiest way to track errors that either begin at, or are carried over from, a particular starting point.

It’s just one manila folder in your Family Filing system; if you’re really pressed for space, you can scan the statements. But do maintain the information so that if any questions arise in the future, you can provide documentation…and have a little security.

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Prior Lost and Found posts can be found here:

Lost And Found: Tax Returns (and memories of 9th grade science class)
Lost And Found: Savings Bonds (and saving yourself a headache later on)
Lost And Found: A Different Kind of Stock (Certificate) Tip
Lost and Found: GONE in 6 seconds: Your Wallet!